Monthly Archives: December 2015

Water Leak Detection Systems – A Landlord’s Best Friend

Floods and water damage can be financially devastating for landlords. But insuring against flooding can be tricky. Flood insurance is usually only available via the National Flood Insurance Program, and there are a number of exclusions to this coverage.

These exclusions include the following:

  • Damage caused by moisture, mildew or mold that could have been avoided by the property owner.
  • Currency, precious metals and valuable papers such as stock certificates.
  • Property and belongings outside of an insured building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs and swimming pools.
  • Living expenses such as temporary housing.
  • Financial losses caused by business interruption or loss of use of insured property.
  • Most self-propelled vehicles such as cars, including their parts (see Section IV.5 in your policy).

Coverage of basements and property therein is also very limited, whether your property is in a flood zone or not. The National Flood Insurance Program also provides only limited coverage in anything below the lowest elevated floor, depending on the date of construction. This includes basements, crawlspaces under elevated buildings, and enclosed areas underneath buildings elevated on full-story foundations (walkabout basements). Finally, your flood insurance won’t cover any improvements you make to basements, including hardwood floors.

What, then, are the options rental property owners have for protecting themselves from other forms of water damage?

Water Leak Detection Systems Can Help

Water leak detection systems can help prevent extremely expensive water damage from burst pipes, broken toilets, etc.There’s not much technology can do to prevent a flash flood. But if water damage is due to water leaks, burst pipes, or appliance malfunctions, there’s a lot that technology can do.

Smart home technology has come a long way in the past few years – to the point where it’s actually quite affordable for property owners to install effective low-voltage devices that can alert you to potential water leaks. Some devices automatically shut off the water for you to prevent further damage, and some allow you to control the shutoff valve remotely.

The latest devices actually connect to a cloud-based computer system that sends a text or alarm to your mobile device or email address. Some devices will also monitor your usage to detect and alert you to slow leaks that may not do much immediate damage but still contribute to the insidious problems of mold and wet rot.

Through sensitive use monitoring, these devices can also detect leaks such as a toilet with a leaky flapper valve, which can waste 50 gallons of water every day.

As you may expect, active systems that can turn off the water supply tend to cost more than passive systems, which simply detect leaks and alert you to the problem.

The High Cost of Water Damage

Failing to quickly detect water leaks can be extremely expensive for rental property owners. According to the Insurance Information Institute, the average home insurance claim for water damage (including damage due to freezing) between 2009 and 2013 was $7,479, not including claims from renters and condominium owners.

Water damage was also the second most common damage claim, affecting nearly two percent of all in-force homeowner policies. In 2013, water damage and freezing accounted for 26.4 percent of all claims dollars the insurance industry paid out. It’s unknown how many landlords may have been uninsured, or underinsured to the point where the amount of money actually paid out was less than the damage incurred.

Maintenance emergencies – like fixing burst pipes and broken toilets – are just the worst. Start working with a professional property manager and never deal with maintenance emergencies again >>

Whole Home vs. Point of Installation

With any given device, you can choose between “whole home” and “point of installation” applications. The latter enables you to shut off water to, say, the laundry room or basement without necessarily impacting the rest of the home. A whole-home system can shut down all the water until you get a plumber on the scene.

Leak Detection System Manufacturers

Well-known manufacturers include Water Hero, Wally, FloLogic, FloodStopper, QMI, DynaQuip Controls (WaterCop), and ZIRCON.

Owners and managers of multifamily buildings may also be interested in Aqua-Stop, by Give Systems.

As with many manufacturers, you may not be able to purchase the systems directly from them. They may refer you to a local installer or vendor.

Your plumber can give you further information. Electrical contractors, home security vendors and even home theater or audio-video companies may offer similar services, since the low-voltage technologies these systems employ have a great deal of overlap with one another.

You can get devices that measure humidity changes, temperature and freezes as well as actual water leaks.

Insurance Discounts are Available

Some insurance companies will offer a discount with a leak detection system that can more than pay for itself over time. One vendor has created a list of insurance companies that provide premium discounts for water detection installations:

  • Chubb Insurance
  • Atlantic Mutual
  • Fireman’s Fund
  • Allstate
  • BCAA
  • Horace Mann Insurance
  • Nationwide
  • Federated
  • Westland
  • Quincy Mutual
  • Kinghorn
  • AIG Insurance

Check with your carrier for specifics, including whether they extend to landlord policies in addition to homeowner policies.

5 New Year’s Resolutions Your Landlord Wishes You Would Make

There is more to an effective symbiotic relationship with your landlord than just handing over your rent check on time. There are a variety of other things you can do to make sure that you are being a good renter, which is a win-win because creating genuine good will may come in handy someday when you need your landlord to give you a glowing review or cut you some rental related slack. With the New Year approaching quickly, here are five ways you can make your landlord’s life a little easier.

1. Report Repairs Quickly

When you let something that was an annoyance turn into an emergency, you cause a lot of stress and potentially a lot more money. Your landlord will never know if something needs fixed if you don’t say anything and keeping your home safe, functional and secure is a large part of his job. If your property doesn’t have a specific way to report issues, one of the best ways to do so is to write a thorough description of the problem, date it and then keep a copy for yourself before you deliver it. That way, your bases are covered and your landlord can more effectively file a work order or reminder.

2. Ask First

The phrase “It’s easier to ask for forgiveness than permission” does not apply in the home rental situation. Do you want to paint or plant a garden? You are much more likely to get an affirmative reaction if you present something as a well thought out plan. Many changes may actually improve the property, but it’s rarely going to go over well if you don’t ask first.

3. Be Understanding

You are entitled to be treated professionally and respectfully during your rental agreement, but it goes both ways. Keep in mind that you are dealing with a human that also has a job, responsibilities, bills and a life outside of being your landlord. Give him a break if he doesn’t call you back immediately (unless it is an emergency) or is running a little late for a maintenance appointment. Being kind first can go a long way.

4. Be Responsible

Part of being a renter or a homeowner means knowing how to do basic maintenance. Don’t call your landlord to come and unclog your toilet (without giving it an honest effort) or fix the squeaky door hinges. A small amount of homework on your part will help you stockpile skills you should ultimately have anyway and keep you from being the renter that constantly “cries wolf.”

5. Respect the Neighbors

Don’t make your landlord have to show up at your door every weekend to tell you to keep it down or remind you to take the trash to the garbage can rather than letting it pile up by the back door. He wants to collect your rent and make sure your home is properly maintained; not be your babysitter. Being a respectful neighbor means that you are less likely to be the subject of a flurry of complaints that your landlord must address.

Make your New Year’s resolution to be the kind of tenant you would want to have if you owned properties. Starting any situation off by taking the high road is the best way to develop a relationship that yields positive results for both parties.

The post 5 New Year’s Resolutions Your Landlord Wishes You Would Make appeared first on RentPrep.

Shopping for Rental Property Appliances

Buying appliances for your rental properties is a part of providing your tenants with fine service and top amenities. Many rental properties include a stove, refrigerator and dishwasher as standard. Some properties even provide washers, dryers and microwaves. When one of those appliances is wearing out and the repair service person is estimating a bill that rivals the price of a new one, it’s time to go shopping.

Here are 5 tips for shopping for appliances so you get the best deal and keep a little money in your pocket, both immediately and over time.

Comparison Shop for Appliances

It always pays to shop around between 3 or 4 of the leading stores in your area. While one store may be running a sale, the competition may be willing to match that price just to get your business. Certain times of the year are also more popular for retailers to run sales, such as holiday weekends and after the winter holidays. Christmas, Fourth of July and Easter are generally top sales times for appliance stores. Going out of business and liquidation sales are also a great time to get the best deals on appliances.

Read Consumer Reviews on Appliances

Sometimes, cheap appliances are cheap for a reason. Even appliances with respectable brand names can put out products that consumers don’t like. Take the time to read online reviews and reports about some of the different brands and models you are interested in and get the real story. Consumer reviews evaluate price, performance, and more, so you get the actual experiences of hundreds or thousands of customers of the very products you are interested in. You will find reports that range from wonderful to awful, but you’ll get a general idea about the product if many different reports swing to one side or the other.

Consider Less Than New Appliance Options

Retail stores have models on the sales floor so customers can get a good look at all the features and details. However, these floor models eventually get outdated and replaced with the newer models. Retailers are often willing to sell the floor models at a discount, which means big savings for you. Other ways to save big are scratch and dent sales for appliances that have some cosmetic defects and therefore aren’t likely to be sold. Refurbished appliances, where something was returned and repaired, can also give you quality items at low prices.

Consider Appliance After-Purchase Costs

A low purchase price is not going to be worth it if the appliance repairs are overly expensive and frequent. Likewise, appliances that are not energy efficient can drain your wallet, as well as your tenants, in energy bills. Make sure that the brand and model you are considering has easy-to-get parts and that servicing it won’t be a problem. Look for the ENERGY STAR label or similar energy efficiency notice as well.

Unadvertised Specials and Other Extras

Sometimes, sales people at appliance stores know what’s coming around the corner and may be willing to tip you off about unadvertised specials, upcoming sales and other hot tips. You can also ask about freebies with regards to your purchase, like free delivery and installation, and taking out and disposing of the old appliance. It never hurts to ask and sometimes they will be eager to close the sale and will make it worth your while to buy right then and there.

Once you get the best appliance and get it installed in the rental property, don’t forget to leave a copy of the operating manual with the tenant. Make sure you have access to a manual as well, either via photo copy or online PDF.

When you can get a fine appliance at a good price, it’s a smart investment over the long term. Having nice appliances that work well and don’t need much repair will only add to your bottom line as you take good care of your real estate investment property.

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Why HOA Dog Breed Restrictions Can Make Sense

People are emotionally attached to their pets, so nonacademic discussions about pet restrictions can be fraught with emotion and controversy. After all, you’re talking about four-legged members of families. Four out of every 10 American households now own a dog, according to Humane Society statistics.

This means there’s no avoiding the issue of dangerous dogs for homeowner and condo association boards. Even if you have a blanket “no pet” policy, or allow only dogs below a certain size, you still have to maintain consistent enforcement – failing to do so could potentially expose your association to liability.

Understanding the Potential Liability Dogs Pose

Not all pit bulls are dangerous, obviously, but most U.S. dog attacks are committed by that breedFirst, understand that people who call for bans of pit bulls and other specific dog breeds don’t just hate dogs. There are real world legal and financial reasons for considering restrictions. Claims arising from dog bites make up nearly a third of liability claims against homeowners insurance.

Insurance companies track dog bite injuries, the breeds of the offending dogs, and how much dog bite claims cost policyholders. For this reason, property insurance carriers routinely exclude certain breeds of dogs from coverage arising from dog bites. Put simply, if the resident disregards the breed restrictions on their homeowners or renters insurance policy, the insurance company won’t pay the claim.

This potentially puts the ball in your court as an association board member. Landlords have been held responsible for dog bites caused by their tenants’ dogs if they were found negligent, and the same legal reasoning can be applied to homeowner or condo associations.

Here’s an example: Suppose you have a resident who gets bitten by a pit bull. There are serious injuries, and lots of expensive medical bills arise from treating the bite. But the resident’s homeowners insurance policy denies the claim, citing a dog breed restriction in the policy. In that case, the association could find itself the target of a lawsuit, with attorneys arguing that the association knew, or should have known, about the possibly dangerous dog breed.

“A homeowner association may be liable for permitting dangerous dogs to remain on the common areas and private streets owned and controlled by the association,” cautions Kenneth Phillips, a Los Angeles area attorney who specializes in dog bite injury cases. “The Board of Directors of these associations have a fiduciary duty to manage and operate the common areas, including making them safe and warning of any known dangerous conditions.”

Dog Bite Statistics – Frequency and Cost

As the below statistics show, dog bites are surprisingly common occurrences with potentially huge economic and human consequences.

  • 885,000 Americans receive dog bites each year severe enough to require medical attention.
  • 27,000 people received reconstructive surgery in 2013 due to dog bites.
  • 24 percent of fatal dog attacks involved unrestrained dogs off their owners’ properties. 58 percent involve unrestrained dogs on the owners’ properties.
  • Dog bite claims cost insurance carriers almost half a billion dollars per year.
  • The average cost in the U.S. per dog bite-related insurance claim was $27,862, as of 2013.

What Dog Breeds Are Considered Dangerous?

Not all Rottweilers are dangerous, but a large proportion of U.S. dog attacks are committed by that breedAccording to data from the Center for Disease Control, just two dog breeds – pit bulls and Rottweilers – were responsible for nearly two thirds of dog-related fatalities during the period studied, 1979 through 1988. Pit bulls accounted for 66 known deaths, and Rottweilers accounted for 39.

Other purebreds responsible for fatal attacks during that period, according to the CDC, include German shepherds, huskies, Great Danes and boxers. Even the friendly Labrador accounted for one death, as did the Yorkshire terrier.

According to research from Dogbites.org, a dog bite victim advocacy organization that supports breed restrictions, molosser breeds, including pit bulls, Rottweilers, mastiffs, Sharpeis and boxers, can account for the following:

  • 81 percent of maiming attacks
  • 71 percent of attacks on children
  • 87 percent of attacks on adults
  • 72 percent of fatal attacks

Hate being the enforcer of unpopular association rules? Get an association manager to do the dirty work for you >>

Worst-Case Dangerous Dog Scenarios

Two pit bulls were responsible for the biggest dog bite-related judgment in history. The two dogs mauled a third-grader, resulting in the amputation of one of her arms and the permanent disfigurement of the other. In addition to over $100,000 in medical bills, the jury awarded the victim $72 million in compensatory and punitive damages. A judge reduced the punitive damage award to $250,000, but compensatory damages remained at $36 million.

Tragically, the child will not collect anywhere near the amount of money necessary to compensate her for her life-changing injuries as the dogs’ owner was uninsured.

If this tragedy happened on your association’s property, would you be prepared? Would your association’s resources and your existing insurance coverages be sufficient to adequately compensate and protect your members, tenants and guests from the consequences of severe dog bites, if your board were found to be at fault?

Look to Local Laws

Some cities ban certain breeds of dogs within their city limits. If your city is among them, and you ignore illegal dog breeds in your association, your exposure to liability at the association level could be heightened.

Restrictions and Mixed-Breed Dogs

One grey area that regularly presents itself is the issue of mixed breeds. If your organization chooses to restrict certain species of dogs, sooner or later someone will raise the “it’s not a pure pit bull” defense. Is that an out? If your organization allows Labradors but bans Rottweilers, do you have to allow a mix of the two to stay? Labs are not known as a dangerous breed, but the dog will still do some damage as an adult if it decides to chomp down on somebody.

These arguments may seem a little absurd, but that’s the reality of dog breed restrictions. If you don’t address the issue of mixed breeds in writing before the issue comes up, these arguments are exactly the rabbit hole your association’s lawyers will be find themselves going down – and charging you by the hour to do so. Some associations have spent six figures in legal fees trying to evict residents over banned pets – and lost. Don’t let your association be another example.

2016 California Legislative Calendar

The legislative calendar establishes a schedule for the 2015-16 Legislative Session and provides important deadlines to the legislative process. While this is a general outline for the legislative year, the Senate and Assembly Daily Files contain the scheduled events for each day the Legislature is in session. These include committee meetings, scheduled hearings, and Governor’s vetoes. For more information on the Legislative Calendar and Schedules, click here.

January 1 – Bills passed in the previous year take effect, unless they have been designated as “urgency” bills with immediate implementation, or a bill that will take extra time to implement (often given a July 1st effective date).

January 5 – Legislature reconvenes for the second half of a two-year session.

January 15 – Last day for policy committees to hear and report to Fiscal Committees fiscal bills introduced in their house in 2015.

January 22 – Last day for any committee to hear and report to the Floor bills introduced in their house in 2015.  Last day to submit new bill drafts to the Office of the Legislative Counsel. The Legislative Counsel takes the verbiage (sometimes makes adjustments) and puts it into bill form for the legislators to consider.

January 31 – Last day for each house to pass bills introduced in that house in 2015.

February 19 – Last day for bills to be introduced for the 2016 year. That means a bill, in the form created by the Legislative Counsel, needs to have an Author (a legislator) and a number assigned to it (ex: SB 123 or AB 123) in order to be introduced.

March 17 – Spring Recess.

March 28 – Legislature reconvenes from Spring Recess.

April 22 – Last day for policy committees to hear and report to Fiscal Committees fiscal bills introduced in their house in 2016.

May 6 – Last day for policy committees to hear and report to the Floor nonfiscal bills introduced in their house.

May 13 – Last day for policy committees to meet prior to June 6.

May 27 – Last day for fiscal committees to hear and report to the Floor bills introduced in their house.  Last day for fiscal committees to meet prior to June 6.

May 31 – June 3 – Floor session only.  No committee may meet for any purpose.

June 3 – Last day to pass bills out of their house of origin. If the bill is a Senate Bill (SB 123, etc.), then it needs to pass out of the Senate by this date and be sent over to the Assembly for its action. The same is true of Assembly bills needing to pass and being sent to the Senate.

June 6 – Committee meetings may resume.

June 30 – Last day for a legislative measure to qualify for the Nov. 8 General election ballot.

July 1 – Last day for policy committees to meet and report bills.  Summer Recess begins upon adjournment providing the Budget has been passed.

August 1 – Legislature reconvenes from Summer Recess.

August 12 – Last day for fiscal committees to meet and report bills.

August 15 – 31 – Floor session only.  No committees may meet for any purpose.

August 19 – Last day to amend on the Floor.

August 31 – Last day for any bill to pass to the Governor in what is termed an “enrolled” version. The “enrollment” process includes the notation of the exact date and time each bill is sent to the Governor to sign or veto, or he may allow it to become law without signing. (There is no “pocket veto” in California, unlike federal, which allows the President to kill a bill simply by not taking any action whatsoever.) Final Recess begins upon adjournment.

September 30 – Last day for the Governor to sign or veto bills passed by the Legislature. If bills are signed by the Governor, they are CHAPTERED; in other words, filed with the Secretary of State and assigned a chapter number for reference and inclusion in the codes, of which there are 29 (Civil Code, Vehicle Code, etc.).

November 8 – General election

November 30 – Formal adjournment of the 2015-16 Legislative Session at midnight … Sine Die

December 5 – Legislature convenes the 2017-18 Regular Session at 12 noon.

January 1, 2017 – Statutes take effect.

For a glossary of legislative terms (including sine die) click here.


How To Advertise For A Roommate

Having a roommate can be an ideal way to reduce your home expenses and even banish the loneliness of an empty house on the evenings and weekends. However, the wrong roommate can turn these advantages into a nightmare. You may know what kind of person you want sharing your home, but the next step is figuring out how to advertise so that you attract the right kind of applicants.

Here are a few tips on how to advertise for a roommate:

  • Consider your stage in life. You may be the same age as a college student, but in a different phase of life, like invested in a career. Although it may make sense to advertise your extra room on a campus to attract someone within your age group, you have to consider that such a roommate may come with a lifestyle that you don’t want to have to work around. Parties and late night visitors may very well come as a package deal. Alternatively, a roommate that doesn’t mind your late nights and parties may be just the type of roommate you want. Either way, make sure that you place your advertisements where your particular cohort of peers is most likely to see it.
  • Word of mouth. Friends of friends can be a great way to get the word out for a roommate. Not only do you not have to go through random applicants, but you can get a first-hand account of the flaws and benefits of a potential roommate from someone whose opinion you can trust and who is looking out for your interests.
  • Compare interests and hobbies. An applicant may be one of the nicest people you have ever met, but that will begin to matter a lot less if they are a trumpet player that needs to practice several hours a day. Make your needs clear in your advertisement without coming across as unbearably picky (or else no one will want to be YOUR roommate.) For instance, you can say something like “looking for a fun, responsible roommate that values a neat and peaceful home as much as I do.”
  • Check references. Make it clear that you will be expecting several references of previous roommates and landlords. Character references, such as their best friend, are not likely to be able to provide you with the information you need to make a decision. In a pinch, a boss might be able to give you a decent idea of a potential applicant’s qualities in a business relationship. Be wary if the only references someone can provide are several years in the past. This may indicate a recent run of bad luck or poor experiences. You are even within your rights to ask for a background or credit check.

Bringing someone into your home is always something of a risk, even if you take every precaution. Even friends that share interests and get along well in everyday life might find that they don’t make good roommates. Do what you can to promote the best experience possible and keep an open mind. Some of my very best friends were strangers when we became roommates. Remember that you must also be flexible when opening your home to share with a roommate.

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Christmas Bonus for Employees

QUESTION: According to an article in last week’s LA Times, boards cannot give year-end bonuses to employees without membership approval. And even then it may affect the association’s tax status. Our HOA has been giving bonuses for years. Are directors in breach of their fiduciary duties? Will we lose our tax status?

ANSWER: I received multiple emails about the LA Times article. I thought people had misread it so I looked it up online. Unfortunately, the Times article is a train wreck.

No Violation. Contrary to dire warnings by the Times writers, boards can give year-end bonuses to employees. Doing so is not a breach of their fiduciary duties and does not affect their tax status.

Christmas. Boards can even call them Christmas bonuses if they want. I know it’s politically incorrect and sends the PC police over a cliff but using the word “Christmas” does not violate the constitution. Christmas happens to be a national holiday.

Personnel Issues. Boards have the authority to hire employees and contract with vendors to provide services to the membership. This power is found in virtually every set of bylaws I’ve ever reviewed. In addition, associations (through their boards) “may exercise the powers granted to a nonprofit mutual benefit corporation” unless the governing documents specifically provide otherwise. (Civ. Code §4805(a).) This gives broad powers to boards to act on behalf of their associations.

Compensation.The authority to hire employees and contract with vendors means boards can pay for those services. An employee’s compensation can include year-end bonuses, either as part of a negotiated compensation package or as a reward to employees for rendering exemplary service to the association. Boards do not need membership approval for this. The Davis-Stirling Act specifically makes personnel and contract issues executive session topics for boards to address to the exclusion of the membership.

Case Law. The board’s authority to use HOA money for more than just repairing common areas came before the courts in Finley v. Superior Court. In that case, a board used HOA funds to fight the conversion of a nearby military base into a commercial airport. Members of the association sued claiming this was a misuse of their funds and exceeded the board’s authority. The court found that political contributions were not illegal and that boards can take actions they believe are in the best interests of the association, even if members disagree.

Benefits the Association. The Business Judgment Rule relieves directors of personal liability if their decisions are in error, provided they are in good faith and in the best interests of the association. In this case, employee bonuses benefit the association. It establishes good will with employees, promotes stability in the workforce, and encourages good work. Disaffected employees and high turnover are clearly not in the association’s interest—they can be far more costly to an association than a year-end bonus.

Tax Status. Giving a bonus to employees will not result in tax penalties or the loss of an association’s status as a nonprofit mutual benefit corporation. If boards have any concerns on this point, they should contact their association’s CPA.

RECOMMENDATION: Boards should not feel guilty about giving their employees a year-end bonus. And, they should seek legal counsel from legitimate sources.

THANK YOU!

I want to thank everyone for their support this past year. You’ve been terrific in your questions and feedback to the Newsletter and I thank you.

Website. Traffic to the website is up significantly from last year. This year you visited Davis-Stirling.com 800,000 times with 3.4 million page-views. In addition, you offered valuable suggestions for improving the website which were incorporated into the newly designed site we launched last month.

Growth. I deeply appreciate your confidence in our work. Thanks to you, we added over 100 new clients to the firm and expanded our Inland Empire and Orange County offices. In addition, Senator Stirling formally joined as a partner and we changed our name to ADAMS | STIRLING PLC. As Frank Sinatra crooned, it’s been a very good year.

Best Wishes. May you and your families enjoy the holidays and have a New Year filled with peace, prosperity and happiness. From all of us at Adams Stirling, Merry Christmas and Happy New Year. See you in 2016!

OUR TEAM: Larry Stirling, Adrian Adams, Richard Witkin, Bill Dunlevy, Paul Ablon, Aide Ontiveros, Jasmine Hale, Wayne Louvier, Cang Le, Karen Jacobs, Jane Blasingham, Patrick Nichols, Matthew Ames, Nathalie Weinstein, Laura Whipple, Carolyn Houtz, Maureen Davidson, Sue Anderson, Marianne Pick, and Alejandra Alvarez.

FEEDBACK


I had far more responses regarding the 11-year-old director than I could publish. Following is a sampling:

11-Year-Old Director #1. Adrian, you’re a kick! This one had me laughing all through it. I do have one thought…if we modify our bylaws to set an age limit, can we also include a “maturity level”? I suspect there are 11-year-olds with more maturity than some board members I’ve had to deal with. (Best not tell anyone I said that… but, it is amazing what we have to deal with these days.) -Anonymous

RESPONSE: You’re right, there are a lot of people over 18 who still need parental oversight. Unfortunately, many of them are in positions of authority, and not just in associations.

11-Year-Old Director #2. I thought board members had to be owners? Can an 11-year old own property? -Bill D.

RESPONSE. Minors can own property and not all associations require their directors to be members. So both situations present risk. The problem with a minor on title is that they owe no legal duties and they can disaffirm the deed. (Sparks v. Sparks (1950) 101 Cal.App.2d 129.) By setting a minimum age as a director qualification, associations can avoid potential problems with underage directors. I recommend boards amend their bylaws in 2016 to add director qualifications.

11-Year-Old Director #3. You recommended setting the minimum age for directors at 21. Since the legal age of an adult is 18, wouldn’t that result in a discrimination lawsuit? -Kay N.

RESPONSE: Since we live in California, looking at someone sideways can get you sued (or shot). As for discrimination, organizations are allowed to set reasonable qualifications for their leaders. As I noted in my article, many states set 21 and 25 as minimum ages for their representatives. The U.S. uses 35 as the minimum age for President. None have been sued for age discrimination. In my article I recommended 21 as a minimum age. After receiving a long passionate email from a reader about how unreasonable I was, I’ve reconsidered and now think 31 might be a better minimum age.

11-Year-Old Director #4. No court would think that a five-member board of 11-year-olds has any legality whatsoever. So just one 11 year-old on the board is enough of an absurdity, let alone the idea that parents are sending their children into combat zones instead of doing the work themselves. -Kevin H.

*****


FHA/VA Disclosure. If the FHA/VA disclosures apply to condominium developments, are planned unit developments exempt? -Chris A.

RESPONSE: The disclosure is not supposed to apply to planned unit developments. However, the language in the disclosure itself raises questions since it requires an association to disclose whether it is or is not a condominium development. The statute was poorly drafted.


Adrian J. Adams, Esq.
ADAMS | STIRLING
A Professional Law Corporation

“Much More Than Just a Law Firm!” We’re friendly lawyers–boards and managers can reach us at (800) 464-2817 or info@AdamsStirling.com.